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A decision to charge three South Canterbury Finance executives over allegations of masterminding the "biggest fraud in New Zealand's history" without first giving them a chance to explain their actions "is nothing short of mind-boggling", a court was told today.

Former South Canterbury Finance (SCF) chief executive Lachie McLeod, 50, and two of the company's former directors, lawyer Edward Sullivan, 72, and accountant Robert White, 70, deny a $1.6 billion fraud.

The Crown says their actions "contributed directly" to SCF's collapse on August 31, 2010.

Because of the company's participation in the Crown retail deposit guarantee scheme, 35,000 investors were bailed out by the taxpayer to the tune of $1.6 billion.

Allegations of the men being involved in the biggest fraud in New Zealand were "baseless and devoid of any merit", the defence argues.

He said the accused were never questioned over SCF's entry into the Crown retail deposit guarantee scheme, without ever been given the chance to explain what had in fact happened back in 2008 and the role that they had played.

"That people can be charged with the biggest fraud in our history without being given the chance to explain is nothing short of mind-boggling," Corlett said.

Another major failing by the SFO and the Crown was that they did not obtain any Treasury or Reserve Bank documents, nor did they interview anyone there before laying charges.

And the failure to interview "the decision-maker" John Whitehead, Secretary to the Treasury, was unfathomable", the defence told the court today.

"Mr Whitehead was not called because wouldn't have provided the evidence the Crown needed," Corlett said.

"Only he knows what factors he took into account in allowing South Canterbury Finance to enter into the scheme.

"Only he knows if the alleged mis-statements would have made a difference."

The long-time SCF chairman, Timaru financier Allan Hubbard, died after a September 2011 car crash, aged 83 - just months after the SFO laid 50 fraud charges against him.

Defence have compiled three volumes of joint submissions, amounting to a "daunting" 572 pages.

Closing arguments for the defence are expected to take the rest of the week.

Justice Paul Heath will then reserve his decision, which is expected to be released in October.